Euro Hits 3-Month High as Dollar Crumbles on Coronavirus Fears

The euro today to new highs as the dollar crumbled in the face of mounting coronavirus fears amid and falling US Treasury yields dampened demand for the greenback. The EUR/USD currency pair today rallied above the crucial 1.10 level as investors flocked to the single currency boosted by positive euro area fundamental releases.
The EUR/USD currency pair today rallied from an opening low of 1.0885 to a high of 1.1006 in a 120 pip move but was off these highs at the time of writing.
The currency pair traded with a bullish bias from the start of today’s session as investors grappled with rising fears of a global coronavirus pandemic as US health experts warned the country was at risk. The release of in-line Spanish preliminary consumer price index data for February by the National Institute of Statistics also boosted the pair. The upbeat eurozone business climate and economic sentiment indicators released by the European Commission also raised the pair. However, many analysts believe that the euro’s rally could be a result of the unwinding of a carry trade by investors with deep pockets who were net short the euro.
The release of positive preliminary US Q4 GDP data by the Bureau of Economic Analysis had a muted impact on the currency pair. The US Dollar Index kept falling as investors sold the low-yielding currency. Other US releases also could not stop the currency pair’s rally.
The pair’s future performance could be affected by technical and geopolitical factors, and tomorrow’s multiple US and European releases.
The EUR/USD currency pair was trading at 1.0981 as at 18:13 GMT having risen from a low of 1.0885. The EUR/JPY currency pair was trading at 120.98 having rallied from a low of 119.95.

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